Online retailer Ocado has hit back at Tesco's threat to complain to the UK's advertising watchdog about its latest ad campaign, saying its larger rival has a reputation for "responding aggressively".

The threat followed Ocado's claim this week that it would match Tesco's prices on "all household brands" in a programme that would see prices cut on 3,500 lines.

Today (14 March), Tesco responded, claiming it is still cheaper on 2,500 products and said Ocado is up to 65% more expensive on some products.

A Tesco spokesman said: "The issue really is that if you are going to claim something, you need to back it up and be more transparent with your customers."

Ocado said it was "surprised and disappointed" that Tesco was threatening action.

"While we understand that Tesco doesn't like us competing with them, and we know they have a reputation for responding aggressively, we are surprised and disappointed they are threatening us with legal steps when it's quite obvious that our pricing policy is perfectly clear and perfectly legal," an Ocado spokesman told just-food.

The independent grocery retailer said it remained committed to its "Price Match initiative".

The spokesman added: "As with any such activity, carefully thought-through terms and conditions apply to price matching. Ocado will never embark upon any activity which might mislead customers."